Reuters: Nokia thinking about approaching Alcatel regarding tie-up


Several sources tell Reuters Nokia (NOK +0.8%) is "discussing internally" whether it should approach Alcatel-Lucent (ALU +4.6%) about a tie-up. The news service isn't clear on whether Nokia is interested in a full-blown merger. Sources caution no formal talks are currently underway.

Alcatel shares have jumped on the report. They took off earlier this month after the Nokia-Microsoft deal fueled M&A speculation. The Microsoft deal stands to leave Nokia with nearly $20B in total cash, and over $10B in net cash, to go shopping with.

Once the Microsoft deal closes, Nokia will be focused on telecom infrastructure (via NSN), mapping/location services, and IP licensing. One Reuters source states Nokia held "on again, off again" talks about buying Alcatel's mobile infrastructure business until late 2012.

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Comments (25)
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    A complete merger or is it more piecemeal?
    25 Sep 2013, 03:59 PM Reply Like
  • The Deep Value Investor
    , contributor
    Comments (299) | Send Message
     
    Not sure, I wonder if the proposed merger between NOK and ALU would have any impact on WILN since ALU and WILN reached a litigation settlement and part of the settlement is that WiLAN will acquire from Alcatel-Lucent a portfolio of patents and pending applications related to current and next-generation wireless technologies with broad worldwide patent coverage.
    25 Sep 2013, 04:08 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (19295) | Send Message
     
    $ALU, here we go. Nice after hours action. That was luck - out of $NOK and more in $ALU : )

     

    Although, with Alcatel-Lucent's debt somewhat under control by way of Jean Raby, the new CFO, I would like them to go it on their own. After all, especially Alcatel-Lucent via their Shanghai Bell has better ties to China, Indonesia and Vietnam, to name a few, whereas NSN will always have Siemens' bribery legacy to fight against, although this "effect" will diminish over time, now that Siemens is out and mismanaging themselves all on their own again.
    25 Sep 2013, 04:31 PM Reply Like
  • DWD Investing
    , contributor
    Comments (13201) | Send Message
     
    Ah

     

    Indeed. Man I tell you, and I've said this before, I can't find a toe hold with Nokia and what's actually going on. But after today I have a good idea--consolidation in a market that is saturated. That's obvious now.

     

    But why would you be in ALU and not NOkia? I mean I can see the short term upside to ALU, but won't Nokia also surge on news that a buyout is coming?

     

    Now, I say "buy out" because I can see huge upside for Nokia, but a merger? I have no idea what would happen. Can you shed some light on those two possibilities?
    25 Sep 2013, 05:07 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (19295) | Send Message
     
    I'm with $ALU since 9th January and after my last $NOK trade, like I mentioned today on the StockTalk, I don't want to be in $NOK for lack of immediate upside. If this rumour actually becomes reality, things will change, but Nokia will not as if by miracle or order from above turn lagging NSN, underperforming HERE and in-the-making AT into gold medal winners. After all, Nokia did not manage to do so since 2007/2008 - so why does everybody think they will now suddenly win contracts and incur license fees as if there's no tomorrow?
    25 Sep 2013, 05:44 PM Reply Like
  • Timothy Bryan
    , contributor
    Comments (984) | Send Message
     
    Lagging NSN with more than 11 percent margins last quarter, which was far above their competitors?

     

    Even by your standards that is asinine AH.
    25 Sep 2013, 09:25 PM Reply Like
  • DWD Investing
    , contributor
    Comments (13201) | Send Message
     
    AH

     

    I don't know how to respond to your theories about NOK, but I do see and agree why you are out of Nokia right now. However, a lot of people got out at 3.90 for the same reasons, and here we are at support above 6.20.

     

    The reason I say that is that it is now clear that this is a global shakedown in the Network market. I don't know why I didn't realize it sooner. When markets become saturated, we always get mergers and consolidation, until anti trust laws prevent further consolidation. There are winners and losers in a consolidation phase.

     

    If Nokia does buy out or fully merges successfully with ALU, that would be a hard combination to beat down. Back on the farm with my buddy AH, short term gains would also be just amazing.

     

    Back to reality, the way I'm see it currently, you're correct that Nokia stock is now in a consolidation phase and churning, at least for the very real near term. But what has happened with Nokia and MS and now Nokia and ALU, I've been blown away by the action. Two things I never thought would happen: Nokia selling it's brand new effort in phones and Nokia buying, or trying to buy, ALU. Just amazing.

     

    If nothing else happens, and the MS deal closes successfully, I think we'll see a bump and then after a successful QQ report, yet another (based solely on news, but I'll take it). After that, probably mostly flat barring any big news--and that's when I'll start planning my exit.

     

    Until then, I'm long based on:

     

    (1) Finalizing of the deal with MS
    (2) QQ Report
    (3) ALU information
    (4) Other revenue generating operation from Nokia that come out of nowhere and show profit, not limited to but also including patent trolling.

     

    After that, I'm planning exits.
    26 Sep 2013, 05:43 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (19295) | Send Message
     
    Don't worry. Nokia won't buy Alcatel-Lucent. Nokia is busy with desperate housewives and whatnot.

     

    The financial market is a revolving door. You can exit and get back into any security right away.
    26 Sep 2013, 06:05 PM Reply Like
  • DWD Investing
    , contributor
    Comments (13201) | Send Message
     
    AH

     

    " Nokia is busy with desperate housewives and whatnot."

     

    LOL yeah the important stuff.
    26 Sep 2013, 06:57 PM Reply Like
  • jjmc2001
    , contributor
    Comments (1357) | Send Message
     
    Can you take two plow horses and combine them to make a thoroughbred?
    25 Sep 2013, 05:07 PM Reply Like
  • jb8967
    , contributor
    Comments (467) | Send Message
     
    Sirius XM?
    25 Sep 2013, 05:27 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (19295) | Send Message
     
    No, but from two, you can make more shareholder Salami.
    25 Sep 2013, 05:46 PM Reply Like
  • DWD Investing
    , contributor
    Comments (13201) | Send Message
     
    AH

     

    Another good one. "Shareholder salami."
    26 Sep 2013, 06:58 PM Reply Like
  • jjmc2001
    , contributor
    Comments (1357) | Send Message
     
    @jb
    that may have worked.
    The first that came to mind was Sprint/Nextel. Sprint never would have recovered without outside capital. Getting back to NOK/ALU I suspect there may be a lot of redundancy post combination and after massive layoffs something smaller could emerge. That takes time and in that business time is not your friend.
    25 Sep 2013, 05:44 PM Reply Like
  • sidiji
    , contributor
    Comments (262) | Send Message
     
    not going to happen, they have two completely different infrastructure ecosystem, it would be a nightmare to try handle both in a combined company. Nokia needs to hunker down and grow what it already has, a combined NSN, HERE, and the IP portfolio...hire more lawyers and start suing people for IP infringement anywhere nok can find them
    25 Sep 2013, 09:22 PM Reply Like
  • ted lujan
    , contributor
    Comments (1696) | Send Message
     
    Many years ago, I was a share holder in Lucent before the merger. The company was a real loser then and I do not believe the merger with the French company helped. The thought of Nokia even considering a merger with ALU nauseates me.
    26 Sep 2013, 12:04 AM Reply Like
  • Andreas Hopf
    , contributor
    Comments (19295) | Send Message
     
    Profits made via $ALU since last winter are indeed intoxicating and can induce nausea, cold sweat and a clouding of the senses.
    26 Sep 2013, 01:08 AM Reply Like
  • Jonathan Bluhm
    , contributor
    Comments (407) | Send Message
     
    I just don't see an advantage for a deal from NOK's perspective. They just got out of their merger with Seimens, why would they want to use their newly found cash on a struggler like ALU? Why would they even want to get involved in a company that has burnt billions of cash in the last decade, has no better technology or bandwidth than they already have, and has to answer to the French government regarding layoffs, pensions, taxes, etc.

     

    From ALU's perspective I would see them welcoming a NOK deal, they would love to have some cash. But they are finally looking to turn the corner with the recent changes that have been made by Combes. As an investor in both companies, I'd not like to see a deal here. If there was a deal, I'd be more inclined to sell my shares of NOK than ALU.
    26 Sep 2013, 03:31 AM Reply Like
  • Andreas Hopf
    , contributor
    Comments (19295) | Send Message
     
    Well, I very much hope it is just a rumour and nothing will happen. It's good for a trade, though.
    26 Sep 2013, 03:38 AM Reply Like
  • Timothy Bryan
    , contributor
    Comments (984) | Send Message
     
    AH,
    After being so wrong on Nok, I have to give it to you for calling it right with ALU.
    26 Sep 2013, 04:37 AM Reply Like
  • Andreas Hopf
    , contributor
    Comments (19295) | Send Message
     
    Thanks, but that was just luck, no achievement there. Like with what happened on the 3rd with Nokia and made us traders or longs a good bit richer. Nobody could see the Alcatel-Lucent-Nokia rumour coming, like nobody could see Microsoft buying Nokia's D&S division so very soon.

     

    In any case, I believe ALU is a good turnaround story and I will buy more, once this rumour bubble has burst; maybe already this afternoon. I, for one, cannot believe that Nokia, in transition (D&S division gone, AT division in formation, etc.) and a defocused CEO (bonus trouble, divorce, etc.), is very focused right now negotiating an Alcatel-Lucent takeover for real.

     

    And, I would not be so sure that the fairly new CEO Michel Combes with his brand new CFO Jean Raby would actually like to shop themselves into retirement so soon.
    26 Sep 2013, 04:58 AM Reply Like
  • Timothy Bryan
    , contributor
    Comments (984) | Send Message
     
    Well said.
    26 Sep 2013, 05:15 AM Reply Like
  • DWD Investing
    , contributor
    Comments (13201) | Send Message
     
    Prime,

     

    "has no better technology or bandwidth "

     

    ALU does. It's called "vectoring technology" and no one else has it.
    26 Sep 2013, 07:01 PM Reply Like
  • DWD Investing
    , contributor
    Comments (13201) | Send Message
     
    Dia

     

    He already mentioned it was pure luck.
    26 Sep 2013, 07:02 PM Reply Like
  • DWD Investing
    , contributor
    Comments (13201) | Send Message
     
    And like you say, AH, no one saw any of that coming, so I wouldn't count more of the same "not seeing things coming." I've given up trying to figure out Nokia and it's moves. It might go back to 5.50, but even then I've made some good money. In the mean time, I see no short term downside to Nokia. They are making a profit now and have billions in cash. the stock may be dead money, but the company isn't going t die in the next 6 months.

     

    No add in the "no one saw that coming" deals that Nokia has done and is rumored to be doing. This is quite some shakeup. It's almost as amazing as Linux is today, since the last time I played with it in 1999.

     

    --digression
    I may be exiting MS Windows for Linux Mint, or some other distro--or numerous distros. That's amazing. I loaded Linux Mint on my 16GB flash drive, and made it persistent to save OS changes. So now I have a fully functional OS I can run immediately on almost any computer, simply by plugging in the USB drive. I booted it with my 2 month old Sony laptop, and had not one driver issue, and never even loaded a driver, including graphics. Now that's amazing.
    26 Sep 2013, 07:08 PM Reply Like
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